Annual Report 2011 - Watercare

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Watercare Services Limited 2011 ANNUAL REPORT Onehunga gas explosion Early on Saturday 4 June 2011, many New Zealanders woke to the news that there had been a serious accident at a construction site in the suburb of Onehunga, Auckland. Watercare’s Network Maintenance Planner Philomen Gulland, 48, was killed and several of her colleagues were injured when an explosion occurred during an inspection of a 1.9-metre-diameter pipe which had been drained of water. The fire service later identified the presence of gas, and the police, fire service and Department of Labour launched inquiries. Additionally, Watercare commenced its own review. Four Watercare staff members and contractors required hospital treatment. One of these, Network Engineer Ian Winson, 47, suffered serious injuries. Chief Executive Mark Ford described the accident as “a very dark hour for Watercare”, noting at the time: “These people are like family to us”. The accident occurred at a construction site at the intersection of Mt Smart Road, Victoria Street and Athens Road, where contractors earlier that morning had completed the removal of a section of the Hunua No. 3 watermain that had been drained and withdrawn from service. A new section of pipe was to be linked as part of a project which will ultimately connect a new watermain, Hunua No. 4, to the existing network. At the time of the accident, Philomen and her colleagues were commencing a condition inspection of a section of the drained pipe. The project work and the inspection had been scheduled for Queen’s Birthday Weekend as this is typically a time of low water demand in Auckland. Philomen, a Canadian-born mother-of-two, was a popular and well-respected Watercare staff member. Several hundred friends, family and colleagues attended a gathering to farewell Philomen at Auckland’s Waipapa Marae. In a notice in The New Zealand Herald, her colleagues recalled her professionalism, generosity and laughter, and said she would be sorely missed. At a committee meeting on 9 June 2011, members of Auckland Council observed a minute’s silence and expressed their condolences to the families of Philomen and to the others who were injured, recording that this was Watercare’s first lost-time injury accident in 18 months. Construction work has since been completed and the watermain has been returned to service with the new connection in place. Watercare at work Watercare team aids Christchurch recovery Watercare sent a 28-strong response and recovery team to Christchurch following the devastating earthquake that struck the city on 22 February 2011. Christchurch relies on groundwater. Prior to the earthquake, the groundwater was not treated and therefore the city’s water utility provider did not have disinfection facilities or expertise in this area. With the threat of groundwater contamination, the Medical Officer of Health decided it was necessary to chlorinate the water to lower the risk to public health. In the days that followed the earthquake, Watercare set up its containerised mobile Onehunga gas explosion chlorine dosing rig to disinfect water at the largest pump station. This rig had been built following the earthquake in September 2010 and, while it was not needed then, it was quickly pushed into action this time. Watercare also designed and oversaw the production, installation and commissioning of 26 chlorine dosing rigs that were used at the high-risk pump stations. Operations Manager Wastewater Mark Bourne says the Watercare team set up a depot in Christchurch and secured a local contractor to assist with the build of the units. “After the units were pressure tested, we installed and commissioned them before handing them over to the council.” While the majority of work was based around water supply, a team of fitters and instrument technicians was based at Bromley Wastewater Treatment Plant to carry out emergency repair works. Watercare laboratory staff also helped the council with water-quality testing. The staff worked on a rotational basis over the course of four weeks. PAGE 14 North-Western Water Supply Manager Priyan Perera beside one of the pump stations that was affected by the February earthquake. Return to Contents page
Watercare Services Limited 2011 ANNUAL REPORT Governance The board and management of Watercare remain committed to ensuring that the company applies best-practice governance policies and procedures. 1. ACCOUNTABILITY Shareholder Watercare has been the provider of bulk water and wastewater services to the Auckland region since 1991. On 1 November 2010, as a result of Auckland regional governance reforms, the company took over ownership and management of all the water and wastewater assets within the Auckland Council region and began retailing services directly to the people of Auckland. The exception was the Papakura district where retail services continue to be managed via an existing franchise agreement with United Water. People of Auckland Elect Auckland Council Appoint Watercare Board of Directors Appoint Watercare Chief Executive Employs Watercare staff Serves People of Auckland Prior to 1 November 2010, Watercare was owned by six city and district councils. With the disestablishment of those councils and the creation of a single unitary authority, Watercare now has a single shareholder, Auckland Council. Watercare reports quarterly to Auckland Council through the Accountability and Performance Committee (the Committee), a committee of the whole council. The relevant legislation is set out below. Responsibilities The board is appointed by the shareholder to govern Watercare in accordance with the statutory obligations and in accordance with the agreed Statement of Corporate Intent (SCI). The board is ultimately responsible for all decision-making by the company. Operational responsibility is delegated to the Chief Executive by way of a formal delegated authority framework. Statement of Corporate Intent The SCI represents Watercare’s public and legislative expression of accountability to its shareholder and establishes the agreement between the board and the shareholder, setting out the objectives, nature and scope of activities undertaken and performance targets by which the company is measured. Watercare delivered the 2011/12 SCI to the shareholder on 30 June 2011, earlier than required by legislation. This followed a board meeting on 23 June 2011 at which members of the public were invited to attend and speak as the SCI was considered and adopted. As part of the process, feedback from Auckland’s local boards and the Maori Statutory Board was invited. The 2011/12 SCI is published on Watercare’s website www.watercare.co.nz. Performance measurement and reporting The performance of the company against the measures in the SCI is reported to the Committee quarterly. This annual report includes a Statement of Service Performance (SSP), which records the performance of the company against the measures in the 2010/11 SCI. The report is set out on pages 107-111. The company’s annual report also includes the reporting of performance against a number of non-mandatory measures. Performance measures in eight focus areas are reported on pages 20-57. 2. TRANSPARENCY AND OPENNESS Legislative framework Watercare is a limited liability company registered under the Companies Act 1993 which governs the conduct of companies in New Zealand. The Local Government Acts of 1974 and 2002 define the roles and duties of local government organisations in New Zealand and contain specific provisions for Watercare. The legislative framework enabling and governing Watercare’s operations is largely found in three Acts and amendments: 1. Local Government (Tamaki Makaurau Reorganisation) Act 2009 2. Local Government (Auckland Council) Act 2009 3. Local Government (Auckland Transitional Provisions) Act 2010. Under legislation, Watercare is currently a council organisation and will become a council-controlled organisation (CCO) on 1 July 2012. By law it must remain owned by Auckland Council until 30 June 2015. The company’s obligations to deliver water and wastewater services for Auckland are established under Part 5 section 57(1) of the Local Government (Auckland Council) Act 2009 which stipulates that an Auckland water organisation: • Must manage its operations efficiently with a view to keeping the overall costs of water supply and wastewater services to its customers (collectively) at the minimum levels consistent with the effective conduct of its undertakings and the maintenance of the long-term integrity of its assets • Must not pay any dividend or distribute any surplus in any way, directly or indirectly, to any owner or shareholder • Is not required to comply with section 68(b) of the Local Government Act 2002 (voiding the requirement to pay a dividend) • Must have regard for public safety (e.g. the safety of children in urban areas) in relation to its structures. Also under the legislative framework: • At least two board meetings a year are required to be held in public, before 30 June to consider the council’s comments on the draft SCI and after 1 July to consider the company’s performance under the SCI in the previous year • Elected members and employees of local authorities are prohibited from being Watercare directors • The company’s financial statements, the SCI and specified long-term plans must be audited by the Auditor-General, or by an auditor acting on behalf of the Auditor-General. Governance PAGE 15 Return to Contents page
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Annual Report 2011 - Watercare

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